Oil prices reached five-week highs as renewed U.S.-Iran hostilities and concerns over Strait of Hormuz supply disruptions drove market volatility.
Key facts
- •U.S. forces began striking Islamic Revolutionary Guard Corps targets in Iran at 12 p.m. ET on Tuesday.
- •Brent crude reached its highest close since July 24, while WTI hit its highest since July 23.
- •Analysts estimate that energy firms withdrew 0.8 million barrels of crude from storage during the week ending August 28.
- •Russian air strikes in Kyiv and the surrounding region resulted in 12 deaths on Tuesday.
- •The U.S. Treasury Secretary Scott Bessent warned that Washington is preparing to impose new sanctions on Iran.
Oil prices jumped more than $4 a barrel on Tuesday, reaching their highest settlement levels in five weeks. The increase follows renewed fighting between the U.S. and Iran, including U.S. air strikes on Islamic Revolutionary Guard Corps targets, which sparked fears of prolonged energy supply disruptions in the Strait of Hormuz.
By the numbers
Market Impact and Regional Tensions
Brent crude futures rose $4.16 to settle at $94.65, while U.S. West Texas Intermediate (WTI) crude climbed $4.46 to settle at $90.22. The market reaction stems from direct attacks between the two nations and reports of tankers being hit near the Strait of Hormuz, a critical global oil supply waterway that Iran has effectively closed to shipping. Tehran has warned it will block oil exports from the Gulf, while U.S. officials have threatened further sanctions and military responses.
Diesel Prices and Global Supply Concerns
Beyond crude, diesel futures in the U.S. hit a 52-month high after a 51 percent increase over the last 10 weeks. This surge has pushed the diesel crack spread, which tracks refining profit margins, to a record high of approximately $107 a barrel. Meanwhile, ongoing Russian air strikes in Ukraine have added to global energy supply anxieties, as Russia remains one of the world's top three crude oil producers.
Timeline
- July 23-24Brent and WTI crude prices reached their previous high closes.
- Last weekendAn initial exchange of fire occurred between U.S. and Iranian forces.
- Tuesday, Sept 1U.S. forces launched air strikes against IRGC targets in Iran.
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This article was independently rewritten by ManyPress editorial AI from reporting originally published by Channel NewsAsia.
